• Fails to build on early up-move, closer to 114.00 handle.
• Persistent USD selling interest prompts fresh selling.
• Reviving safe-haven demand adds to JPY strength.
The USD/JPY pair quickly retreated around 30-pips from session tops and is now gravitating to the lower end of the daily trading range.
The pair struggled to build on early up-move and failed just ahead of the 114.00 handle amid notable US Dollar weakness. Mounting concerns over the fate of US tax reform plan continued exerting some downward pressure on the greenback and has been one of the key factors weighing on the major.
Adding to this, a modest pull-back in the European equity markets, pointing to cautious sentiment provided an additional boost to the Japanese Yen's safe-haven appeal and further collaborated to the pair's retracement back to the 113.60 region.
Further downside, however, remained cushioned as investors seemed to refrain from placing aggressive bets ahead of the US PPI, due in a short while from now, and ahead of Wednesday's prelim Japanese GDP growth numbers.
Technical levels to watch
Immediate support remains near the 113.45 area, below which the pair is likely to aim towards testing the 113.00 handle with some intermediate support near the 113.20 region.
On the upside, the 114.00 handle now seems to have emerged as a key hurdle, which if cleared might trigger a short-covering bounce towards 114.30 intermediate hurdle ahead of the 114.45-50 region and 114.75 area (early Nov. high).
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